Schlichter Sued for Fiduciary Breach

Litigator Jerry Schlichter has been sued…for a breach of fiduciary duty.

According to a report in the St. Louis Post-Dispatch, Schlichter (and his firm) has been sued by partner Roger Denton—the third name in St. Louis law firm Schlichter, Bogard and Denton—alleging he’s been cheated out of at least $875,000 in legal fees.

According to the report—the suit itself has been sealed from public view following a motion from Schlichter, who argued that it contained highly confidential material—Denton accuses Schlichter of manipulating how the firm calculated his cut of fees. 

The controversy arose in the wake of Denton’s 2016 decision to wind down his partnership interest in the firm. According to the report, Schlichter and Wolff threatened to dissolve the firm over the dispute, so Denton agreed to renegotiate the partnership agreement “to avoid litigation and to provide certainty” to the firm’s clients and employees, he says in the lawsuit. Denton agreed to modify their partnership agreement in 2017, including a formula for calculating fees from successful cases at the firm. Essentially, he claims that any work done on cases before the end of 2016, when Denton wound down his partnership share, meant a higher share of fees for Denton. His cut of fees for work on cases in 2017 and later is lower, and those for Schlichter and Wolff is higher, the lawsuit says, according to the report.

However, in the suit Denton claims that Schlichter gave “express directions” to the firm’s staff to use different dates for when a case file was opened than when work actually started. As for that fiduciary charge, “Schlichter concealed his scheme from Denton thereby breaching his fiduciary duties owed to Denton,” the report claims, citing the lawsuit.

One specific case cited in the article involved a suit involving Columbia University where Denton alleges that Schlichter told staff to mark a file as opened on the very date a retirement fee lawsuit was filed.  But Denton pointed to Schlichter’s affidavit in the case supporting a request for attorney fees, in which Schlichter allegedly says the firm’s investigation of the Columbia case “was extensive, lasting well over one year prior to the filing of a 403(b) university plan lawsuit.” Denton claims that that one circumstance effectively reduced Denton’s share of the Columbia University case fee by $188,000, he says in his lawsuit.

The report quotes Schlichter, who it says has not yet filed a response, as commenting that “the case has no merit, plain and simple. We have treated and continue to treat our retired partner extremely fairly in the six years since he left the firm and moved to Florida.”

As for what presumably triggered the concerns, Denton says he had received quarterly disbursements of the fees since 2017, but he grew suspicious after his December 2021 disbursement statement included a “unique entry” that was titled: “Corrections to previously collected cases overpaid to Roger based on realization.” That entry reduced his distribution that quarter by nearly $59,000, according to the St, Louis Post-Dispatch. The report goes on to note that Denton then asked for documentation about how his share of fees was being calculated, but that the firm has not provided him “complete information” to support how his fee share is calculated. “Without a complete accounting itemizing the amounts deducted from the gross fee, Denton cannot accurately assess the amount of his damages,” Denton’s lawsuit says, according to the report.